The British bank issued $3 billion worth of so-called contingent-capital bonds earlier this month, receiving strong demand from yield-hungry investors enticed by the 7.625% coupon. But Gimme Credit is concerned that buyers might not understand the all-or-nothing proposition of the deal.

Unlike a contingent-convertible note–called a CoCo bond–which converts to equity when a certain capital threshold is breached, these contingent capital notes–CoCa bonds, if you will–become worthless, giving the investor no upside potential should the bank recover.

Barclays states in the prospectus that if its tier-1 capital ratio, a measure of financial health, falls below 7%, “you will lose the entire amount of your investment in the notes and have no further rights against us with respect to the repayment of the principal amount of the notes.”

A new Barclays PLC (BCS, BARC.LN) effort in its research department aims to go beyond traditional buy-or-sell stock advice, embracing numbers-based “quantitative” research with a program designed to supplement its analysts’ opinions.

The latest offering is a shift away from the traditional standard for stock research, where banks primarily offer their analysts’ opinions on how much their analysts think shares are worth and whether investors should buy, sell or hold the shares.

“Clients rarely make a decision using a single analyst’s opinion. They’ll go around Wall Street and find other points of view,” said Rob Rouse, Barclays’s deputy head of U.S. equity research. He says the new program should “help them find other points of view from around our own firm.”

That investors shouldn’t trust the capital markets to safeguard their investments has been made painfully and abundantly clear the past decade. That investors have little choice but to put their money on those same markets is just as clear. Therein lies the dilemma.

Today’s spectacle, a senior member of the Bank of England, Paul Tucker, testifying in Parliment about his role in the Libor scandal is the latest blow to any sense of trust in the marketplace.

Tucker was there to refute former Barclay’s CEO Bob Diamond’s recounting a conversation the two had about the “high” Libor numbers Barclay’s was reporting back in 2008.

Tucker vehemently denied he had encouraged Diamond to lower the rates Barclays was reporting to the British Bankers Association in compiling Libor rates. He didn’t say that Diamond was lying, but he did say that Diamond got the “wrong impression” from a conversation they had in 2008.

The Libor scandal is mushrooming right now. The degree to which this one particular benchmark is being exposed as not only flawed, but widely gamed, is the latest scandal to undermine investor trust in the markets.

Talking about rattling investor confidence: Two big news stories are shaking the financial industry this morning.

First is WSJ’s front-page story detailing Barclays paying a record $453 million in fines after admitting its traders and executives tried manipulating interest rates. The Journal reports investigators in the U.S., Europe and Asia have been probing alleged wrongdoing in this arena for about two years in the aftermath of the financial crisis.

The Barclays settlement is the biggest yet. But some of the details from this story show exactly why investor confidence is so low right now. From WSJ:

Emails and instant messages disclosed in the bank’s settlement show how Barclays’s traders tried to manipulate rates to benefit their own trading positions.”This is the way you pull off deals like this chicken,” one trader told another trader in March 2007, according to the U.K. regulator. “Don’t tell ANYBODY.”

“These two events this week underscore that the banking industry has become its own worst enemy,” says Doug Kass, a hedge-fund manager at Seabreeze Partners. “The Dodd-Frank legislation and the other restraints currently being considered on the commercial banking industry seem justified by the relentless abuse of power and the aggressive use of client deposits in risk-taking strategies.”

Stocks are slumping this morning, with the Dow down more than 100 points. Financials are leading on the downside, with J.P. Morgan is down 3% and Citigroup off 2.3%. Goldman Sachs, Morgan Stanley and Bank of America are each down more than 1%.

Rising competition in the online video and DVD-rental market threatens to hit Netflix’s subscriber growth, analysts at Barclays warn this morning while downgrading their recommendation on Netflix shares to “equalweight” from “overweight.”

Shares recently fell 1.8% to $111.88. The stock is still up 61% this year and is the third best performer in the S&P 500.

Barclays is particularly worried about Amazon Prime’s subscription video-on-demand offering. The firm estimates Prime could have close to 3/4 the number of titles Netflix currently has by the end of 2012.

Netflix also faces rising competition from companies that offer similar services.

The U.S. stock market’s sizzling start to 2012 is starting to show signs of vulnerability.

That’s the viewpoint over at Barclay’s Capital, where strategist Barry Knapp lays out several reasons why the market’s momentum may be waning and the upside for stocks at current levels is limited.

For one, he believes household deleveraging and the economy’s vulnerability to rising gas prices could weigh on stock prices. The election will also turn out to be “far more significant” to domestic investors in 2012 than worries about Europe, according to Knapp.

“Once the GOP selects a candidate and the debate about debt, deficits and the 2012 ‘fiscal cliff’ moves to center stage, the recent bounce in confidence should fade,” Knapp says.

Meanwhile, slowing earnings growth, inflation volatility and the winding down of major central bank monetary easing all will ultimately weigh on stocks, says Knapp, who maintains a 1330 year-end S&P 500 price target. The index would need to fall about 3% from current levels to reach his target.

This autumn’s trend of modest yet consistent improvements in U.S. economic readings will likely fade away, threatening one area of guarded optimism that has provided support to equity prices, according to Barclays Capital.

Economic reports ranging from jobs data to consumer spending and manufacturing activity have been rebounding of late as fears of another recession have subsided. Improving U.S. economic data and strengthening corporate profits have been an underlying strength for a market that has been jostled by Europe’s sovereign-debt crisis.

The Standard & Poor’s 500-stock index has jumped 13% since early October and is down less than 1% on a year-to-date basis.

A top Barclays investment-banking executive says currency trading is likely to be calmer this year compared to the frenzied 2010.

Currency trading in 2010 “was very much driven by events,” including the euro-zone crisis, questions about the U.S. dollar’s strength, and the emerging markets, said Jerry del Missier, co-head of Barclays Capital.

Shares in Barclays PLC and Royal Bank of Scotland Group PLC were under pressure Wednesday, amid growing speculation the banks will be ordered to separate their retail and investment banking operations.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.

Global investment banks got a second-quarter revenue boost from a surge in Asian stock trading. But given China’s market volatility and stock declines in some other countries, those revenue gains may be hard to replicate.